Shareholders of Texas Pacific Land Corp (Symbol: TPL) can enhance their income by selling a November covered call at the $1100 strike, earning a premium based on the current bid of $99.90, which translates to a potential annualized return of 25.4%. This yields a total annualized return of 26% if the stock is not called away. TPL shares currently trade at approximately $1048.07, indicating that a 5% increase in stock price would result in it being called away, providing a 14.5% return including any dividends collected.
The company currently offers a 0.6% annualized dividend yield, which is subject to change based on profitability. Texas Pacific Land Corp’s trailing twelve-month volatility is calculated at 52%, which is important when considering the risk of selling the covered call against the potential reward.
